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Q2: A: Suppose that you manage a risky portfolio with an expected rate of return of 12% and a standard deviation of 25%. The T-bill rate is 3%. Your client chooses to invest 60% of a portfolio in your fund and 40% in the T-bills. What is the slope of the Capial Allocation Line (CAL)? 0.36 B: Suppose the same client in the previous problem decides to invest in your risky portfolio a proportion (y) of his total investment budget...

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• ### You manage a risky portfolio with an expected rate of return of 19% and a standard...

You manage a risky portfolio with an expected rate of return of 19% and a standard deviation of 34%. The T-bill rate is 8%. Suppose that your client prefers to invest in your fund a proportion y that maximizes the expected return on the complete portfolio subject to the constraint that the complete portfolio’s standard deviation will not exceed 19%. a. What is the investment proportion, y? (Round your answer to 2 decimal places.) b. What is the expected rate...

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You manage a risky portfolio with an expected rate of return of 19% and a standard deviation of 34%. The T-bill rate is 8%. Suppose that your client prefers to invest in your fund a proportion y that maximizes the expected return on the complete portfolio subject to the constraint that the complete portfolio’s standard deviation will not exceed 19%. a. What is the investment proportion, y? (Round your answer to 2 decimal places.) b. What is the expected rate...

• ### Problem 6-18 You manage a risky portfolio with an expected rate of return of 17% and... Problem 6-18 You manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 38%. The T-bill rate is 6%. Suppose that your client prefers to invest in your fund a proportion y that maximizes the expected return on the complete portfolio subject to the constraint that the complete portfolio's standard deviation will not exceed 17% a. What is the investment proportion. Y? (Round your answer to 2 decimal places.) Investment proportion y b....

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